When it comes to investing for retirement, annuities tend to get a bad rap. Not only do some annuities come with high fees that are hard to justify, but they are notoriously difficult (or impossible) to liquidate when you need cash. Further, some annuities are so complex that even experienced investors can hardly understand them.

So, should you even bother with an annuity? Well, it depends. Not all annuities are created equal. It might be worth giving them a chance if your retirement goals fall under a specific set of criteria. For certain types of investors heading toward retirement, annuities might even be one of the best options available. Here are some of the situations where annuities work best:​1. You want guaranteed income for life. Many annuities have an option that allows the contract owner to get guaranteed income until they die. This income won't decrease due to market volatility, making it a smart bet for people whose priority is making sure they have a base income as they age.

2. You hope to secure guaranteed income for a spouse. With certain types of annuities you can add the option to provide a lifetime guaranteed income for not just you, but also your spouse. If this option is selected, the guaranteed income from your annuity will extend until your spouse passes away. According to Arizona financial planner Charles Scott, the insurance company is taking the venture you'll die before your life expectancy age, while you're betting you live longer. In the case of your spouse, the same bet is being made. The key to finding the right annuity is a thorough understanding of the financial product. "Shop around, because there will always be some differences in how much each insurance company is willing to pay out," Scott says.

3. You want a low-risk portfolio above all else. When we talk about "guaranteed" income for retirement, we're talking about income that requires little risk. As long as you understand the terms of your annuity and fulfill your side of the deal, you can secure guaranteed, no-risk income for life. For retirees who fear volatility in the markets or running out of money, annuities can make a lot of sense, says Indiana financial advisor Tom Diem of Diem Wealth Management. "Annuities are safe and tend to outperform bank certificates of deposit," Diem says. However, the way annuities work requires you to lock your deposits into pools of money drawing historically low interest rates. While your return is low-risk and often guaranteed, "One's expectations for return must be accordingly low," says Diem.

4. You want to create your own pension. Decades ago, workers relied on guaranteed pensions to fund retirement. Today, very few workers enjoy this level of financial security. That's why retirement today has become increasingly difficult, says Alex Whitehouse, a financial advisor in Vancouver, Washington. "Retirees used to count on the three-legged stool for their retirement income: Social Security, employee pensions and individual savings," Whitehouse says. Now, only a small fraction of private sector companies provide traditional pension plans. "An annuity could be used to generate lifetime income and replace the pension leg of the stool," Whitehouse says.

5. You want to protect your retirement assets from taxes. Traditional retirement accounts like IRAs and 401(k)s grow tax-deferred, meaning you don't pay taxes on your money until you begin making withdrawals. Annuities also provide tax benefits. "Using an annuity for a portion of your assets will allow your money to grow tax-deferred," says Seattle financial advisor Josh Brein. "So, if you're not planning on taking all the money out for a while, then an annuity could be a good way to reduce your tax load in retirement."

How to decide if an annuity is right for you. While annuities can make a lot of sense for retirees who worry about longevity risk and want guaranteed income, there are certain risks to watch out for. "Buying guaranteed income with an annuity is usually a very expensive proposition, especially at today's interest rates," says Grant Bledsoe, a financial advisor for Three Oaks Capital Management in Lake Oswego, Oregon. "Additionally, insurance companies and salesmen will normally push their more expensive variable and index annuities." These products are very rarely the best place for your money, due to their hidden and often misunderstood expenses. "Never buy an annuity if you don't understand it inside and out," Bledsoe says.

Not only should you research annuities and ask questions before you pull the trigger, but you should also sit down with a financial advisor to set your priorities. While guaranteed income for life sounds good, you may find that you have other important goals to shoot for. "If a low-risk portfolio is more important than hedging against inflation, or lifetime income outranks leaving an inheritance, an annuity could be considered," says Benjamin Brandt, a financial advisor in North Dakota. But don't make any big decisions until you sit down to hash things out with your advisor and spouse.